Skadden/DPW v. S&C: Boom Goes The Dynamite

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The deal between Citigroup and Wachovia fell through, allowing Wells Buffet Fargo to swoop in and pick up the ball Citigroup dropped.

Citigroup is considering whether to increase it’s bid for Wachovia or sue Wachovia according to the Wall Street Journal. They might also consider crying themselves to sleep on their huge pillow.

But legal insiders are busy blaming people for the aborted merger between the two commercial banks. The Wall Street Journal Law Blog suggests that Sullivan and Cromwell –counsel for Wachovia on both mergers– attorneys hit the snooze button one too many times:

We lobbed a call over to Wachovia’s lawyer, S&C’s Rodgin Cohen, to find out. Cohen declined to comment on the record. But in looking for clues this morning, we came across this National Law Journal story entitled, “Crisis mantra for sleep-deprived M&A attorneys: don’t sweat the small stuff.”

Discussing the feverish pace of three recent billion-dollar bank mergers, the NLJ quoted Cohen in explaining how to put such deals together so quickly: “We all understood, you can’t sweat the small stuff.”

The Law Blog claims that the “small stuff” might be an exclusivity agreement:

Citi claims the letter of intent it reached with Wachovia contained an exclusivity agreement prohibiting Wachovia from trying to lure other bidders. …

An M&A partner at a large New York firm who spoke with us this morning says no. “Quite often, letters of intent don’t include exclusivity agreements.”

Additional winners and losers after the jump.

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Should the deal between Wachovia and Wells Fargo hold up, Wachtell will have even more money to throw into associate bonuses. Wachtell was the lead counsel on Wells Fargo’s end of the merger.

The American Lawyer reports that DPW could be a loser if Citigroup can’t acquire Wachovia:

The legal losers, should Citi miss out on the Wachovia bonanza, would be Davis, Polk & Wardwell, Citi’s lead counsel in the now-aborted deal, and Skadden, Arps, Slate, Meagher & Flom, which also advised Citi, according to previous reports in The Am Law Daily.

A spokesman says Davis Polk will not comment at this point on Citi’s options. Eric Friedman, the soon-to-be executive partner who led the Skadden team on the Citi deal, did not return messages seeking comment.

That gentle humming you hear is an army of litigators firing up Westlaw.

Mmmmm …. recession proof industry (drool).

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In Wachovia, Citi Deal, Did S&C Overlook Some ‘Small Stuff’? [WSJ Law Blog]

Wells Fargo to Buy Wachovia in $15.1 Billion Deal [Dealbook]

Sullivan, Wachtell on Disputed Wachovia-Citi Deal [Law.com]

Citi’s “Agreement” [Dealbreaker]

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